The construction costs have recorded a surge up to 25% since theonset of the Iran Wardue to the disruptions in supply chain, labour migration, higher raw material prices and shortages of key materials.

"Construction costs have risen by over 25% since the onset of hostilities — a pressure that is meaningful and warrants attention. However, the organised sector today is far better equipped to navigate such challenges than it has been in previous cycles,” said Shekhar Patel, President, CREDAI.

CREDAI has also engaged with the Union Housing Ministry, seeking appropriate RERA timeline relief to protect both developers and homebuyers.

“The more immediate concern is not just cost escalation but availability. Certain critical materials are not accessible in the market regardless of price– a situation the sector has rarely encountered,” it said.

Vikas Oberoi, chairman and managing director, Oberoi Realty, told investors during the FY26 earning call that the energy costs, aluminium, glass have gone up, labour has become expensive, availability of materials has become a bit of a challenge.

“These are stressing us out. But it's a problem for the entire industry now it's slowly starting to hurt you in a way.”

The Managing Director and CEO of Godrej Properties, Gaurav Pandey, told the investors that the cost impact would be between 5% and 6%.

“I think more fundamental is the supply side shock. If the situation in the Gulf continues for 6-12 months, then I think that's something which has different economic risks than only sector specific,” Pandey said.

Essential prices of the inputs of the construction materials like cement, construction chemicals, steel, sand, bricks, bitumen, electrical wiring, and other continue to rise, while there is an availability challenge for some items.

Since the onset of Iran War,centre has hiked the fuel pricesto contain the losses against the rising crude prices. Prices were increased for the first time on May 15 by Rs 3 per litre, followed by another hike of around 90 paise on May 19, and got costlier for the third time on Saturday. The fourth price hike came into effect on Monday, taking the Petrol prices above Rs 100 mark.

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